Chancellor tax U-turn welcomed by local MP
Berwick MP Anne-Marie Trevelyan has welcomed the Government's U-turn on national insurance contributions for the self-employed.
Just days after Chancellor Philip Hammond announced the increase in the Budget, he told MPs that it would not proceed.
The Berwick constituency has more than 6,500 self-employed workers.
Mrs Trevelyan said: “I am delighted the Chancellor has listened and has agreed to reverse his decision to raise national insurance contributions for the self-employed.
“I am pleased he has committed to working with colleagues in the coming months, on how we can develop a holistic personal taxation framework which aims to simplify the system and provide greater transparency and clarity for taxpayers on what their money is used for.”
The Chancellor admitted that the proposal broke the spirit of a 2015 Conservative manifesto pledge not to raise taxes.
The scrapped tax rise leaves a £2billion hole in a budget that the Chancellor had last week touted for not increasing public borrowing. Mr Hammond pledged to bring forward proposals to fill that gap in the autumn.
In a letter to MPs, Mr Hammond said it was ‘very important both to me and to the Prime Minister that we are compliant not just with the letter, but also the spirit, of the commitments that were made.’
The Chancellor said that a lock put into legislation in 2015 made clear that Class 1 national insurance for employees would not rise, but did not mention Class 4 national insurance. But he added that “in light of the debate over the last few days it is clear that compliance with the ‘legislative’ test of the manifesto commitment is not adequate.”